Impending higher UK import taxes on Chinese-made cars?
Discussion
At present cars imported into the UK from China pay the standard 10% import tariff, the same as cars from Japan, Korea or anywhere else outside Europe.
Conversely, the same Chinese-built car imported into an EU country is charged a variable extra tariff; so for example a Polestar 2 sold across the channel pays 19.3% + 10% import taxes, for a total of nearly 30%.
However as the EU continues to raise domestic subsidies and import taxes against the threat of China, they are now threatening to lock the UK out unless we align with their tariffs - specifically to match their import taxes on Chinese EVs.
Now it's always possible that the UK government may refuse, or some other deal may be done. And if import tariffs are imposed, there will probably be some notice and opportunity to buy a car already 'in the pipeline'. But if you are thinking of ordering a car to spec with some lead time, well, you might be better off moving sooner rather than later.
There's also the question of imports of Chinese ICE and hybrid cars, which have risen in Europe in response to EV-specific import tariffs; it wouldn't be a surprise to see the EU extend taxes to these, otherwise they have the double whammy of going backwards on both trade and the environment.
Conversely, the same Chinese-built car imported into an EU country is charged a variable extra tariff; so for example a Polestar 2 sold across the channel pays 19.3% + 10% import taxes, for a total of nearly 30%.
However as the EU continues to raise domestic subsidies and import taxes against the threat of China, they are now threatening to lock the UK out unless we align with their tariffs - specifically to match their import taxes on Chinese EVs.
FT said:
Brussels has warned Andy Burnham that Britain would need to raise tariffs on Chinese cars and align more closely with EU trade policy if it wants to avoid “made in Europe” barriers that would hit key exports.
https://www.ft.com/content/5453be91-7bd9-4097-9e83...Autocar said:
According to a report in the Financial Times, the UK has been told by the EU that it must apply the additional tariffs, which rise to 45% depending on the car maker; and in return the EU is prepared to treat Nissan, Range Rover and Bentley EVs as ‘Made in Europe’ under the proposed Industrial Accelerator Act (IAA), which is designed to better protect European industry from hyper-competitive Chinese alternatives.
https://www.autocar.co.uk/car-news/business-corpor... (£)Autocar said:
Chinese firms are able to sell higher levels of EVs in the UK than in the EU, because the UK hasn't applied the same ‘countervailing’ import tariffs on EVs built in China.
The UK may need to change its position on that for the EU to agree for its inclusion in the proposed ‘Made in Europe’ regulation changes, which would favour cars built within the bloc.
https://www.autocar.co.uk/car-news/new-cars/nissan...The UK may need to change its position on that for the EU to agree for its inclusion in the proposed ‘Made in Europe’ regulation changes, which would favour cars built within the bloc.
Now it's always possible that the UK government may refuse, or some other deal may be done. And if import tariffs are imposed, there will probably be some notice and opportunity to buy a car already 'in the pipeline'. But if you are thinking of ordering a car to spec with some lead time, well, you might be better off moving sooner rather than later.
There's also the question of imports of Chinese ICE and hybrid cars, which have risen in Europe in response to EV-specific import tariffs; it wouldn't be a surprise to see the EU extend taxes to these, otherwise they have the double whammy of going backwards on both trade and the environment.
Chery are looking to borrow Line 1 of Sunderland from Nissan to produce UK built cars. Ptobably to bypass all of this.
Nissan and Chery International UK to study manufacturing Chery International UK passenger vehicles at Sunderland Plant https://share.google/GCdpsOWUtWNgEDOL4
Nissan and Chery International UK to study manufacturing Chery International UK passenger vehicles at Sunderland Plant https://share.google/GCdpsOWUtWNgEDOL4
hidetheelephants said:
Is re-export from the UK to the EU a significant trade? If there are boat-loads of LHD stuff arriving here and immediately going to Rotterdam then maybe they have a point.
Can't circumvent the tariffs applied - the Country of Origin will remain as China even if shipped from UK to EU. The UK has a slight problem in that it is a RHD market in a LHD region.
If the Chinese continue to dump product in the UK to gain market share at what point do the established European manufacturers decide it isn’t worth engineering and tooling a RHD car because their is no return on investment?
Then all you’ll be able to buy is Chinese stuff. Which is China’s plan mind you.
If the Chinese continue to dump product in the UK to gain market share at what point do the established European manufacturers decide it isn’t worth engineering and tooling a RHD car because their is no return on investment?
Then all you’ll be able to buy is Chinese stuff. Which is China’s plan mind you.
LRDefender said:
Surely if the U.K. gov introduce punitive taxes on Chinese cars then it's the hard working, cash strapped British consumer that foots the bill. As a capitalist society don't we want competition?
I understand your point. However there are some products from China that are being sold below cost price to displace the EU manufacturers.I know of a European tools company that, like all companies, buys a sample of a rival new product and tears it down to work out the costs to build, etc
One recent Chinese product - it was a robot lawnmower - when they took it apart, one key part cost as much as the device was being sold for…
I’m all for competition but when your competitor has state backing and state funding to undercut and remove the competition - that’s not really capitalism…
vaud said:
LRDefender said:
Surely if the U.K. gov introduce punitive taxes on Chinese cars then it's the hard working, cash strapped British consumer that foots the bill. As a capitalist society don't we want competition?
I understand your point. However there are some products from China that are being sold below cost price to displace the EU manufacturers.I know of a European tools company that, like all companies, buys a sample of a rival new product and tears it down to work out the costs to build, etc
One recent Chinese product - it was a robot lawnmower - when they took it apart, one key part cost as much as the device was being sold for
I m all for competition but when your competitor has state backing and state funding to undercut and remove the competition - that s not really capitalism
Exystenshalist said:
I am sceptical about such claims. In my experience (lived and worked in China for over a decade, set up multiple businesses there), China is the most capitalist place imaginable. Competition between firms in China is incredibly fierce. All governments make bets on and support industries they deem to be strategically important, but I think that the narrative of Chinese state funding and backing is significantly overblown by parties with a vested interest in demonising China.
I don't believe that it is rampant, but I can believe the Chinese state would do it in focused sectors to gain market share/remove competition in a short-medium term basis. I know the company involved in this example and they are one of the most ethical, quality vendors that I know.
One issue with China (aside from IP theft, which is still rampant and unchecked, and is not demonising China), is the rules.
For example, if you sell covered goods in the European Union, you generally must supply spare parts for 5 to 10 years after the product leaves the market, depending on the specific product category.
How do you enforce that if China says "sorry, no"?
vaud said:
Exystenshalist said:
I am sceptical about such claims. In my experience (lived and worked in China for over a decade, set up multiple businesses there), China is the most capitalist place imaginable. Competition between firms in China is incredibly fierce. All governments make bets on and support industries they deem to be strategically important, but I think that the narrative of Chinese state funding and backing is significantly overblown by parties with a vested interest in demonising China.
I don't believe that it is rampant, but I can believe the Chinese state would do it in focused sectors to gain market share/remove competition in a short-medium term basis. I know the company involved in this example and they are one of the most ethical, quality vendors that I know.
One issue with China (aside from IP theft, which is still rampant and unchecked, and is not demonising China), is the rules.
For example, if you sell covered goods in the European Union, you generally must supply spare parts for 5 to 10 years after the product leaves the market, depending on the specific product category.
How do you enforce that if China says "sorry, no"?
You're absolutely right - there's certain emerging industries where the state has made damned sure Chinese businesses capture the market share. EVs are a good example, things like robot mowers and vacuums another. And so on.
That's compounded by the Western manufacturers having 'manufacturing tech debt', so it's not a case of springing up from scratch, but absorbing the costs of the pivot. A double whammy.
Quelle surprise the UK is appeasing China, Super Embassy planning approved, the spy case disappeared, only 10% charged on imported China made cars...EU up to 45%, US 100%.
Its about time we started to look after our interests...if anyone wants to sell goods here its under our rules, sadly we have had spineless Governments past and present that don't think that way.
Its about time we started to look after our interests...if anyone wants to sell goods here its under our rules, sadly we have had spineless Governments past and present that don't think that way.
I see no issue with Chinese cars.
They were very early to adopt EV tech as they have proved hopelessly poor at making their own ICE engines, so why not.
I would not be shocked in my life time to see several brands we currently think of as European or American being owned entirely by Chinese firms, or people like VAG, or Stellantis will sell certain brands to them to fund their dying breaths in the car industry
They are coming, they are here in huge numbers already, you cannot fail to see the huge rise in Chinese brands on our roads in a very short timeframe. and it is because they are cheap, we are lazy and easily conned, and most of them are on lease deals so it doesn't really matter if they go wrong.
If you give your ability to buy a car to someone else, they will buy Chinese every time, not everyone gives a toss about what car they drive.
They go say "oh it looks like a Range Rover for half the price durrrr"
They were very early to adopt EV tech as they have proved hopelessly poor at making their own ICE engines, so why not.
I would not be shocked in my life time to see several brands we currently think of as European or American being owned entirely by Chinese firms, or people like VAG, or Stellantis will sell certain brands to them to fund their dying breaths in the car industry
They are coming, they are here in huge numbers already, you cannot fail to see the huge rise in Chinese brands on our roads in a very short timeframe. and it is because they are cheap, we are lazy and easily conned, and most of them are on lease deals so it doesn't really matter if they go wrong.
If you give your ability to buy a car to someone else, they will buy Chinese every time, not everyone gives a toss about what car they drive.
They go say "oh it looks like a Range Rover for half the price durrrr"
bergclimber34 said:
I see no issue with Chinese cars.
They were very early to adopt EV tech as they have proved hopelessly poor at making their own ICE engines, so why not.
I would not be shocked in my life time to see several brands we currently think of as European or American being owned entirely by Chinese firms, or people like VAG, or Stellantis will sell certain brands to them to fund their dying breaths in the car industry
They are coming, they are here in huge numbers already, you cannot fail to see the huge rise in Chinese brands on our roads in a very short timeframe. and it is because they are cheap, we are lazy and easily conned, and most of them are on lease deals so it doesn't really matter if they go wrong.
If you give your ability to buy a car to someone else, they will buy Chinese every time, not everyone gives a toss about what car they drive.
They go say "oh it looks like a Range Rover for half the price durrrr"
Geely already heavily invested in major European brands. Lots of shared build examples Chery building JLR stuff in China under licence see the Freelander 8They were very early to adopt EV tech as they have proved hopelessly poor at making their own ICE engines, so why not.
I would not be shocked in my life time to see several brands we currently think of as European or American being owned entirely by Chinese firms, or people like VAG, or Stellantis will sell certain brands to them to fund their dying breaths in the car industry
They are coming, they are here in huge numbers already, you cannot fail to see the huge rise in Chinese brands on our roads in a very short timeframe. and it is because they are cheap, we are lazy and easily conned, and most of them are on lease deals so it doesn't really matter if they go wrong.
If you give your ability to buy a car to someone else, they will buy Chinese every time, not everyone gives a toss about what car they drive.
They go say "oh it looks like a Range Rover for half the price durrrr"
Well it sounds like the sort of coercive trick the EU would play on an aspiring trading partner. And the UK government will probably cave in and gratefully accept the extra income raised by the higher tariffs. Screw the consumer.
It’s all too late now, the Chinese are here to stay. And as Joe Public becomes increasingly impoverished it’s all they/we can afford…
It’s all too late now, the Chinese are here to stay. And as Joe Public becomes increasingly impoverished it’s all they/we can afford…
More noise that this is likely
https://www.reuters.com/world/uk/britain-expected-...
and finally a description of why the EU would press for it
the first part is naked self-interest and a bit rich to be honest. The UK taxpayer is already sending French-government-controlled Renault a four grand subsidy for each 4, 5 or Twingo they sell here, a grant not available to any Chinese-built cars, yet even that's not enough of a slant to the playing field.
The second part I sort of understand, BYD could set up a factory in the UK assembling 'European made' EVs from Chinese battery packs and components and get in on the favourable EU schemes. No doubt the French remember their pain when Nissan first set up shop in Sunderland and sold cars into their markets tax-free and they couldn't do anything about it. However it doesn't quite justify taxing the import of complete RHD Chinese EVs into the UK.
At present EU tariffs only apply to full battery EVs, so hybrids such as the ever-popular Jaecoo 7 sidestep them; however the EU are considering extending duties to hybrid imports too.
This could have a significant impact. As well as the carmakers concerned, it'll affect the popular EV salary sacrifice schemes, where many of the most popular longer-range cars are Chinese-built; and absent balancing government measures will tend to slow down EV adoption. It may also lead to China applying equivalent tariffs to our imports, possibly negatively affecting JLR and others.
Beneficiaries will obviously be their rivals; Nissan, Renault, Stellantis and especially Hyundai/Kia who are already often the most competitive EVs with the Chinese.
The silver lining for anyone intending to buy a Chinese EV in the next year is that it took the EU 13 months to go through the process to justify their tariffs to the WTO, so even ordering a car with say a six-month lead time now, you shouldn't face an unexpected extra ten grand bill when it arrives.
https://www.reuters.com/world/uk/britain-expected-...
and finally a description of why the EU would press for it
Sam Lowe said:
“The EU is worried that Chinese EV exports to the UK eat up market share from European-made vehicles, and that China invests in the UK as a means of getting into Made in Europe by the back door,” he added.
https://www.ft.com/content/0f48c61b-a490-4bdc-8473...the first part is naked self-interest and a bit rich to be honest. The UK taxpayer is already sending French-government-controlled Renault a four grand subsidy for each 4, 5 or Twingo they sell here, a grant not available to any Chinese-built cars, yet even that's not enough of a slant to the playing field.
The second part I sort of understand, BYD could set up a factory in the UK assembling 'European made' EVs from Chinese battery packs and components and get in on the favourable EU schemes. No doubt the French remember their pain when Nissan first set up shop in Sunderland and sold cars into their markets tax-free and they couldn't do anything about it. However it doesn't quite justify taxing the import of complete RHD Chinese EVs into the UK.
At present EU tariffs only apply to full battery EVs, so hybrids such as the ever-popular Jaecoo 7 sidestep them; however the EU are considering extending duties to hybrid imports too.
This could have a significant impact. As well as the carmakers concerned, it'll affect the popular EV salary sacrifice schemes, where many of the most popular longer-range cars are Chinese-built; and absent balancing government measures will tend to slow down EV adoption. It may also lead to China applying equivalent tariffs to our imports, possibly negatively affecting JLR and others.
Beneficiaries will obviously be their rivals; Nissan, Renault, Stellantis and especially Hyundai/Kia who are already often the most competitive EVs with the Chinese.
The silver lining for anyone intending to buy a Chinese EV in the next year is that it took the EU 13 months to go through the process to justify their tariffs to the WTO, so even ordering a car with say a six-month lead time now, you shouldn't face an unexpected extra ten grand bill when it arrives.
bergclimber34 said:
I see no issue with Chinese cars.
They were very early to adopt EV tech as they have proved hopelessly poor at making their own ICE engines, so why not.
I would not be shocked in my life time to see several brands we currently think of as European or American being owned entirely by Chinese firms, or people like VAG, or Stellantis will sell certain brands to them to fund their dying breaths in the car industry
They are coming, they are here in huge numbers already, you cannot fail to see the huge rise in Chinese brands on our roads in a very short timeframe. and it is because they are cheap, we are lazy and easily conned, and most of them are on lease deals so it doesn't really matter if they go wrong.
If you give your ability to buy a car to someone else, they will buy Chinese every time, not everyone gives a toss about what car they drive.
They go say "oh it looks like a Range Rover for half the price durrrr"
China started from behind, and rather than play catch up with ICE cars, they wisely decided to invest in electric vehicles and the associated technology. They are now world leaders in battery technology and possibly other areas too. The Chinese did copy, and steal, but now they develop. It is all part of a plan to dominate the world and put other countries industries out of business. They were very early to adopt EV tech as they have proved hopelessly poor at making their own ICE engines, so why not.
I would not be shocked in my life time to see several brands we currently think of as European or American being owned entirely by Chinese firms, or people like VAG, or Stellantis will sell certain brands to them to fund their dying breaths in the car industry
They are coming, they are here in huge numbers already, you cannot fail to see the huge rise in Chinese brands on our roads in a very short timeframe. and it is because they are cheap, we are lazy and easily conned, and most of them are on lease deals so it doesn't really matter if they go wrong.
If you give your ability to buy a car to someone else, they will buy Chinese every time, not everyone gives a toss about what car they drive.
They go say "oh it looks like a Range Rover for half the price durrrr"
Motoring journalists obsess about scratchy plastics, space for bottles of water and how fun it is to drive. I bet most people consider it a way to get from A to B, and look at space, toys, range and price.
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